The Army is pursuing a multi-year deal with Boeing [BA] to procure between 240 and 450 AH-64E Echo variant Apache helicopters that could be worth between $5 billion and $10 billion depending on quantity, according to a service spokeswoman.

Army spokeswoman Sofia Bledsoe said Jan. 29 in an email the procurement would also involve Apaches for potential Foreign Military Sales (FMS) customers. Army Apache Program Manager Col. Jeff Hager said Jan. 28 at a Boeing event the multi-year deal would run from 2017 to 2021 and that the justification and approval (J&A) has been approved by Army acquisition executive Heidi Shyu. The Army did not confirm Shyu’s approval of the J&A by press time Jan. 29.

Hager said Boeing has delivered 93 Apaches to the Army since October 2011 and additional units to international customers since 2012. The service wants to procure a total of 690 aircraft, he added.

Hager also said the Army this year will start development of the Lot 6 aircraft of Apaches that will be marinized for use in water environments. Hager expects marinized Apaches to enter production in 2017, once a contract with Boeing is secured, and he anticipates follow-on test and evaluation in late 2017.

The Army assumes the Asia-Pacific rebalance will mean an increase in operations in the littorals, for which a marinized Apache will enhance its utility. Bledsoe said the Army has explored several marinizing options, including corrosion protection, aircraft and personnel safety and aircraft sink arrest and recovery. To date, she said, the principle enhancements are the inclusion of a maritime target set to the fire control radar, a marine mode to the UHF radio and an expanding tube assembly to enable safe pilot egress of they have to leave the aircraft while underwater.

“We are exploring other undefined upgrades to assist Apache operations in a maritime or embarked environment,” Bledsoe said.

Boeing is producing Lot 3 helicopters with Lot 4 set to begin production in 2015 and deliver in 2016. These aircraft would include Link 16 connectivity that was successfully demonstrated in a follow-on test and evaluation in August.

Japan has announced that it plans to buy E-2D early warning and command and control aircraft and the Global Hawk for intelligence, reconnaissance and surveillance missions as part of an effort to build up the military in the contested Asia-Pacific region.

The country’s Defense Ministry also set in motion buys of V-22 Ospreys to meet its requirement for 17 tilt-rotor aircraft, a plan it outlined in November. The V-22s are built by a partnership of Boeing [BA] and Bell Helicopter, a division of Textron [TXT].

Northrop Grumman [NOC] is the manufacturer of the E-2D Advanced Hawkeye, the latest version of the aircraft being produced for the U.S. Navy and the Global Hawk, the high altitude unmanned air vehicle flown by the U.S. Air Force. Tokyo made those announcements as it signed off on a defense budget for fiscal 2015.

Japan selected the E-2D over Boeing’s offer of the Wedgetail early warning aircraft based on the 737 airframe and sold internationally. And the Global Hawks were chosen over General Atomics’ Guardian unmanned aircraft that is a variant of the MQ-9 Reaper.

Japan intends to buy one E-2D and reportedly three or four Global Hawks.

The U.S. Navy plans to buy 75 of the E-2Ds, which are manufactured in Saint Augustine, Fla.

The decision to buy the V-22s came despite concerns in previous years in Japan about the aircraft. Some Okinawa resident had protested the deployment by the U.S. Marines of V-22s and the Japanese government didn’t sign off on it until the Pentagon explained in August 2012 the causes behind a couple accidents, a deadly one in Morocco and another in Florida earlier that year.

The Marines began basing V-22s at Marine Corps Base Futenma, which lies in a densely populated area of Okinawa, shortly after getting Tokyo’s nod.

The Army’s fiscal year 2016 budget request acknowledges that it can’t have a ready force now and invest in future warfighting systems given the tight budget environment, so the service chose to prioritize operational readiness and higher troop levels now while taking risk in longer-term technological superiority.

Given increasing global obligations, the Army’s budget request attempts to slow the reduction in the Army’s active duty force—not dropping to 450,000 active duty troops until FY ’18 instead of ‘17–and it boosts readiness levels through increased operations and maintenance funding. Those troops will be organized to be more agile, and their training will emphasize a range of warfighting core competencies rather than just security assistance.

That near-term readiness comes at the expense of technological superiority in the future. The Army does not have a single new major modernization project planned until next decade, and Director of Army Budget Maj. Gen. Thomas Horlander said Feb. 2 at a Pentagon budget briefing that procurement spending as a percentage of the overall Army budget is at a historic low–18 percent, compared to 20 to 22 percent. “Continuous delayed or reduced funding in our modernization and equipping accounts puts the Army’s technological overmatch advantage at risk,” he warned.

“We are trying to mitigate the risks as best we can by doing the incremental improvements for the existing fleets,” Deputy Director for Army Budget Davis Welch told reporters at the same Pentagon briefing. “Certainly those fleets have been in the inventory a long time, the M1 tanks since 1980. So we are incrementally improving those proven systems and trying to extend their useful life as either the topline increases and we can start a more robust procurement program, or go back for the Future Infantry Combat Vehicle, which is what the Army would like to continue doing once toplines return … to a higher level.”

The research, development and acquisition budget is $23.1 billion, up from FY ’15 and back to FY ’13 levels, before the brunt of sequestration hit. The Research, Development, Test and Evaluation (RDT&E) request of $6.9 billion is even with last year’s. Welch praised the Army for maintaining “a fairly robust science and technology program as other [research, development and acquisition] accounts are being reduced. And I think that’s, with the topline we’re given, about the best we can do at the current funding level.”

The procurement request of $16.1 billion is up more than $2 billion from last year. “Though this is a sizable increase,” Welch said, the Army has still spent about $4 billion a year less than it should have to reach its 20-percent procurement spending over the past few years, including in this request.

And, that boost in procurement spending may not end up as large as planned–the Pentagon’s budget request is $36 billion above the congressionally mandated spending caps, and breaching those caps would result in another round of across-the-board cuts. Army documents note that at the president’s spending level, it would maintain 475,000 active duty soldiers, prioritize helicopter fleet modernization and ground force investments in the Armored Multi-Purpose Vehicle and the Paladin Integrated Management. Under sequestration-level spending, the Army would go to a 470,000-troop active force with tiered readiness, and modernization accounts would be cut by 12 percent.

Under the higher spending-level request, the Army would invest $783 million in its Warfighter Information Network–Tactical (WIN-T), including upgrades for 31 WIN-T Increment 1 units to enhance interoperability with the fielded Increment 2 units, as well as procuring 248 communication nodes for Increment 2 and fielding and supporting already-procured units.

The Army would spend $308 million to buy 450 Joint Light Tactical Vehicles, with low-rate initial production (LRIP) beginning soon after a single vendor is selected in the fourth quarter of FY ’15.

The budget request includes $561.1 million to complete procurement of the third Double-V Hull brigade set of Stryker vehicles and procure another 87 vehicles for the fourth brigade set–these with Engineering Change Proposal 1 technologies built in. The funding would also support fleet modifications and address technology obsolescence.

The Army is also asking for $367.9 million to continue with Abrams tank modifications, $273.9 million to buy 30 Paladin Integrated Management LRIP units, $334 million for family of medium tactical vehicle procurement and $28 million for family of heavy tactical vehicle procurement.

The RDT&E budget heavily invests in the Armored Multi-Purpose Vehicle, setting aside $230.2 million for the detailed design of components and subsystems.

On the aviation side, the Army is requesting nearly $4.6 billion for its aircraft portfolio in FY ’16, up 9.6 percent from the nearly $4.2 billion enacted this year. The service is also requesting $820 million in aircraft modifications, down from the $878 enacted in FY ’15. This funding request notably includes $49 million in overseas contingency operations (OCO) funding while the no OCO funds were appropriated last year.

The Army wants to ramp up procurement of remanufactured AH-64 Apache Block IIIA, or AH-64E, helicopters, requesting $1.2 billion in FY ’16, a 63 percent increase from the $716 million enacted in FY ‘15. The service also wants $210 million this year for advance procurement of remanufactured Apache IIIAs, nearly 33 percent more than the $158 million previously allotted. The $1.2 billion would procure 64 AH-64E “Echo” models and associated modifications to the AH-64D fleet.

The Army wants 5.9 percent more funding in FY ’16 for multi-year procurement of UH-60 Black Hawk helicopters as it requests $1.4 billion, $80 million more than what was enacted in FY ’15. The service also wants $127 million for Black Hawk advanced procurement, $10 million more than enacted last year.

The Army wants roughly $1 billion in FY ’16 for CH-47 Chinook cargo helicopter multi-year procurement, up nearly 15 percent from the $892 enacted in FY ’15. The service, however, seeks nearly 3 percent less for Chinook advance procurement, with $99 million requested this year. Congress appropriated $102 million for Chinook advance procurement in FY ’15.

Despite these investments in incremental improvements to existing platforms, the Army makes clear it is facing a tough future if Congress cannot find a way to undo sequestration. In the near term, this budget request “partially mitigates the risk inherent with funding reductions under sequestration levels … and begins to restore funding in modernization that remains near historic lows.” In the longer-term, however, “sequestration in FY16-FY23 dramatically suppresses defense spending without acknowledging the world in which we live.”

The first of 15 EC135 T2+ training helicopters being produced by Airbus Helicopters for Australia completed its first test flight on Jan. 16, two months after signing the contract for the aircraft, the company said on Jan. 26.

The helicopter is being produced for the Australian Defence Force (ADF) as part of a planned fleet for the new Helicopter Aircrew Training System (HATS). The HATS project is a joint training scheme for Australian Army and Navy personnel to train with the EC125 T2+, EC135 flight simulators, and a new flight-deck equipped training vessel at sea.

The First EC135 T2+ training helicopter produced for the Australian Defence Force’s HATS training project. Photo: Airbus Helicopters.The First EC135 T2+ training helicopter produced for the Australian Defence Force’s HATS training project. Photo: Airbus Helicopters.

The first new training helicopter had its test flight from the production site at Donauwörth, Germany. The flight lasted 57 minutes.

This first test validated aircraft systems and engines with future flights expected to test customer equipment.

The EC135 T2+ is a civil design helicopter, but with military training attributes, Airbus said. It has a high-visibility cockpit, multi-axis auto-pilot, and a twin-engine system to replace current single-engine types. The company highlighted that the helicopter meets all training, technical, and safety requirements for future Army and Navy crews.

“At Airbus Helicopters we are thrilled to have reached such a fantastic milestone in only two months from contract signing last November,” Peter Harris head of sales of Airbus Helicopters–Australia Pacific, said in a statement.

“This clearly demonstrates the commitment that we have toward supporting Boeing Defence Australia in meeting the ADF’s needs for training all future combat helicopter aircrew for the Royal Australian Navy and the Australian Army. We will take all of our milestones just as seriously.”

The Initial Operating Capability (IOC) is scheduled for late 2018. At full capacity, the HATS system is to accommodate up to 140 students a year. It will cover pilots, aviation warfare officers, aircrewmen, sensor operators, and qualified aircrew returning for instructor training.

Raytheon [RTN] on Jan. 26 said it has acquired Sensintel, a small Arizona-based firm that develops and produces small unmanned aircraft systems (UAS) for the intelligence and special operations markets.

Terms of the deal were not disclosed but Raytheon said it would not be material to its first quarter or full-year results in 2015. The business will become part of Raytheon’s Missile Systems segment.

Sensintel was divested by Britain’s BAE Systems in 2013, which had purchased the business in 2008 for $14.7 million when it was called Advanced Ceramics Research, Inc. BAE originally purchased the company to complement its work on larger UAS systems in Britain.

However, BAE found that it was unable to create synergies between its small UAS and large UAS efforts, leading to the sale of the business to Matthew Pobloske, who was its director of Business Development. Pobloske renamed the company Sensintel.

At the time of BAE’s divestiture, Sensintel had about 30 employees. It now has about 50.

Sensintel has relationships with the Special Operations Command, the Office of Naval Research and the Air Force Research Laboratory. Raytheon said the company also serves government and commercial customers by integrating mission specific sensors and subsystems into manned and unmanned platforms.

“Sensintel’s expertise in unmanned aircraft systems solutions make it a natural fit with Raytheon’s Advanced Missile Systems product line,” Taylor Lawrence, president of Raytheon Missile Systems segment, said in a statement. “The acquisition of Sensintel enhances the growth prospects of our UAS business and the advanced capabilities we can offer our customers.”

Sensintel’s UAS products include the Silver Fox, Manta and air-launched Coyote. The Silver Fox was used by the Navy during Operation Iraqi Freedom. The Coyote is used to help with hurricane forecasting and the Manta for geo-science research.

Sikorsky [UTX] is starting bladed ground testing for the S-97 Raider program, the company said on Feb. 4.

The Raider is an armed reconnaissance rotorcraft designed to outmatch conventional military helicopters in maneuverability, payload, speed, range, and high/hot environmental conditions, the company said.

The ground runs testing phase will involve the Raider team testing the first of two prototypes as a complete system. They will perform initial ground tests with the helicopter tied down while focusing on verifying correct operation of the propulsion system, drive train, rotor control system, and pilot-vehicle interface.

Sikorsky previously completed software qualification testing, component fatigue testing, and gearbox testing for the prototype, the company said.

The program team at the company’s Development Flight Center in West Palm Beach, Florida is also preparing to begin the final assembly of the second prototype S-97.

“Testing all of the aircraft’s systems together, for the first time, marks significant progress in the development of this next generation helicopter and moves the program closer to first flight,” Mark Hammond, S-97 Raider Program Manager, said in a statement.

The company launched the S-97 Raider program in Oct. 2010, hoping to mature the X2 rotorcraft design while offering a helicopter to meet U.S. Army reconnaissance and special operations needs. The first prototype was unveiled in October.

The S-97 “features next-generation technologies in a multi-mission configuration, capable of carrying six troops and external weapons,” Sikorsky said. It has a cruise speed of up to 220 knots (252 mph).

The S-97 demonstrator program is fully industry-funded.